Target: Wood Mackenzie
Price: $1.7 billion
Sponsor: Hellman & Friedman
Buyout group Hellman & Friedman said it will take a majority stake in energy analysis group Wood Mackenzie in a deal that would value the company at £1.1 billion ($1.7 billion) including debt and marks a relatively quick turnaround for seller Charterhouse in an otherwise sluggish buyouts market.
The deal comes just three years after Charterhouse acquired the business in a £553 million buyout, which ranked as the largest private equity deal in 2009, and could help Wood Mac expand in North America as well as possibly paving the way for a stock market listing in New York. While private equity groups grew rich throughout the middle of the last decade by buying companies and selling them a couple of years later for vast profits, these days buyout firms frequently own businesses for up to seven years before selling.
Charterhouse kicked off the sales process earlier this year, hoping to hook a rival analysis, data or media group such as IHS or McGraw Hill, bankers familiar with the process have said. Hellman & Friedman, also an investor in data company Nielsen, will take a 63 percent stake in Wood Mac and will be the company’s third private-equity backer in the last 10 years.
Wood Mac’s management and staff led by Chief Executive Stephen Halliday will hold a 24 percent equity stake in the company, valued at £132 million under the Hellman deal.
The deal gives Edinburgh-based Wood Mac, which produces research on the oil, gas, metals and power markets, a valuation of about 12.5x projected EBITDA, according to one person familiar with the situation. Wood Mac is projected to make EBITDA of £88 million in 2012, rising to £100 million in 2013.
The deal will be backed by around £550 million of debt or approximately 6.5x the company’s EBITDA. Financing is being led by Nomura and will consist of senior leveraged loans and mezzanine loans which will be provided by MezzVest, Noonday and Sankaty.
(Simon Meads is a correspondent for Reuters in London.)